bustle digital group

Media watchers were introduced to a strange new word last year that doesn’t seem to be going away in 2021.

SPACs, an acronym for the less catchy Special Purpose Acquisition Company, also known as “blank check” entities, act as a shell company that investors pour money into via an initial public offering. They then use those funds to acquire a company that will inherit its stock exchange listing minus the traditional time-consuming IPO process.

While they have been around for a while, media’s interest in them only really took off in 2020 as the pandemic hit the sector hard, making consolidation, especially on the digital side, an increasingly attractive option. Companies slashing marketing budgets, more ads being swallowed up by Facebook and Google and venture capitalist investors’ waning interest in digital media have all played a part.

“There were things venture capitalists didn’t like about our business the last three years,” said one digital media chief executive officer, who requested anonymity. “The main thing being they didn’t see a quick path to getting 100 times their money back. That’s just not really what we’re built for as digital media companies. We’re built for reasonable, sustained growth. We’re marathon runners not sprinters. VCs want sprinters. They want companies that can be 10 times bigger in one year — that’s not what digital companies are meant to do.

“Digital media and venture capitals were always an odd marriage and not a great fit for each other. Public markets are just a much better fit,” the executive continued, predicting that a handful of major digital companies will have merged through SPACs by the end of the year.

There are some, though, that warn the market could get overheated. Among them is David Solomon, CEO of Goldman Sachs, who said in an earnings call earlier this week, “Like many innovations there is a point in time as they start where they have a tendency maybe to go a little bit too far and they need to be pulled back or rebalanced in some way….And that’s something my guess is we’ll see over the course of 2021 or 2022 with  SPACs.”

Whichever direction the trend takes over the next several months, here are some of the media players getting involved in the space:

Group Nine

The publisher of Popsugar, Thrillist and The Dodo stands out from other digital companies in the space as it actually set up its own SPAC. In December, in a corporate filing, Group Nine unveiled the SPAC Group Nine Acquisition Corp., formed with the goal to go public and acquire other digital media businesses, which will be combined with Group Nine Media, in which it owns a 20 percent stake. On Wednesday, it revealed that it had raised $230 million through its IPO. Group Nine Acquisition Corp. is led by Ben Lerer, Group Nine Media’s CEO, while Brian Sugar, president of Group Nine Media and cofounder of Popsugar, is president and a director.

Bustle Digital Group

Reuters first reported earlier this month that Bustle Digital Group, the owner of Bustle, Mic and Nylon, among others, was exploring a potential merger with blank-check acquisition companies aiming for a valuation of at least $600 million. Not long after, founder and CEO Bryan Goldberg confirmed in an interview with TechCrunch that he was indeed mulling entering the SPAC space, but did not comment on the valuation number. He said: “I want to take this company public; I’ve admitted that in the past. I’ve never said it quite this clearly….I think that the SPAC revolution that’s taken place in the last year, it’s not for every startup, but I do think it’s a good fit for this startup. The reason I think it’s a good fit for this startup is one, I know what I want to do with the capital, I want to raise hundreds of millions of dollars, and then I want to go buy a lot of media companies.” As previously reported  by WWD, in September BDG was pitching potential investors amid the pandemic.


Fresh from its surprise acquisition of The Huffington Post from its parent company Verizon Media in a stock deal, The Wall Street Journal reported that BuzzFeed was also exploring the SPAC space. In the case of the Jonah Peretti-led company, it would most likely team up with a SPAC to acquire more companies. BuzzFeed declined to comment and has not made any public statements as of yet.


Playboy Enterprises is joining forces with Mountain Crest Acquisition Corp., a publicly traded SPAC, in a deal that is expected to close in the first quarter of 2021. Playboy, founded by the late Hugh Hefner in the early 1950s, had been private since 2011. The new venture will be called Playboy Group, Inc. and its focus is sexual wellness products, clothing and digital gaming products. Playboy magazine ceased print operations in March, stating that economic disruptions from the pandemic were too much for its already strained print operations to bear. In contrast, Playgirl, which began life as a feminist response to Playboy in 1973, made its print comeback last year.

Joanna Coles

Freeform’s “The Bold Type” show isn’t the only venture occupying Joanna Coles’ time. Hearst Magazines’ former chief content officer and Cosmopolitan’s ex-editor in chief has teamed up with New York Islanders owner Jon Ledecky for a SPAC, North Star Acquisition Corp., which raised $250 million in a November public offering. Its prospectus said it was targeting companies in the beauty, wellness, self-care, fashion, e-commerce, subscription and digital media spaces and the following month it revealed it was merging with Barkbox, a subscription service for dog owners. Coles and Ledecky are reportedly already mulling their next SPAC.


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Media People: Emma Rosenblum of Bustle Digital Group